US sanctions cut Huawei profits by half in first quarter The first quarter of 2023 wasn't an easy one for Chinese tech giant Huawei, which saw its profits continue to plunge in the face of sanctions with sales largely stagnant, growing just 0.8 percent compared to the same quarter last year. Huawei is a private company but has long reported basic financials. This quarter it only …
"The US isn't exactly building its own Great Firewall, but Huawei shouldn't be shocked if it finds itself deprived of another ingress route into the US economy, or if its economic woes continue until that beefed-up R&D budget is able to deliver."
Of course, the US shouldn't be surprised if China deprives Apple of an ingress route into the Chinese economy by banning the sale of iPhones there. After all, that is what the US did to China in 2017.
Huawei became a behemoth in smartphone terms without access to one of the world's biggest smartphone markets. How would Apple do without access to China.
That particular card hasn't been played by China yet.
These results seem to show a turnaround with revenues slightly up in spite of US efforts to destroy the company and huge R&D investments.
'De-Americanisation' is now fully underway at Huawei and very probably at key international suppliers who have been strangled by what many consider now to be 'toxic' US IP as it was weaponised by the Administration.
V
>> Of course, the US shouldn't be surprised if China deprives Apple of an ingress route into the Chinese economy by banning the sale of iPhones there. After all, that is what the US did to China in 2017. <<
We already have some insights from how China kicked out South Korean businesses one by one: Samsung was forced out about a decade ago. In response, the conglomerate pulled out of China and closed the last smartphone factory in 2019; and left for Vietnam. Samsung is still #1 in global smartphone sales without any Chinese sales and the company's output accounts for as much as 20% of Vietnam's GDP today. The same can be said for Hyundai/Kia who was once among the top sellers in China in early 2010's , but now with a diminutive market share. They rose from #5 to #3 in global auto sales during the same time. China also blocked and harrassed South Korean EV battery businesses from doing business in China starting mid 2010's, now with almost nada market share; now they are expected to dominate 80+% of the NA market and 70+% of global market share.
Nobody is surprised at the CCP's quest for dominance and the US is taking appropriate actions, such as the IRA/CHIPS Act/Huawei ban/etc to counter China's aggression. Apple will continue to do well without China even if they are forced out. There is a lot of opportunity outside China.
>> Huawei became a behemoth in smartphone terms without access to one of the world's biggest smartphone markets. <<
Huawei's smartphones were never competitive. Their phones were available for sale in the US as early as 2013, but sold piss-poor in the US with less than 0.10% market share -- Huawei can't sell jack without demand driven by nationalism.
>> ... How would Apple do without access to China. ... That particular card hasn't been played by China yet. <<
No worries. As explained above,
Apple has already begun the process of moving out of China.
>> These results seem to show a turnaround with revenues slightly up in spite of US efforts to destroy the company and huge R&D investments. <<
*yawn*
Apple would be critically damaged by any loss of access to the Chinese market.
If there was no demand and Huawei phones weren't competitive, how did they become the world's number one vendor of handsets at the beginning of 2020? Without access to one of the world's largest markets.
The AT&T deal would have seen Huawei phones offered by a major carrier. Back then it was the key to national distribution.
This post has been deleted by its author
Huawei has a hidden advantage over similar sized western corporations in that its 'employee owned'. In the normal course of finance a 25% drop in profits would cause chaos at a normal corporation as the company desperately cut costs across the board to try to maintain its overall profitability. However, if the company is closely held -- private -- or employee owned (same thing, effectively) different financial rules apply. A 25% drop in profits, especially one forced on the company by events outside its control, is unwelcome but hardly damaging.
Banks can be unwelcome partners. During the 2008 downturn I was working at a closely held company, one that had relatively little debt (it had avoided the trap of selling off its real estate to lease it back, for example). Regardless of the order book, the steady profits and so on the bank tried to kill it by calling its working capital loan. It was able to deal with this problem but sometimes banks' view of companies is warped -- to the bank the real estate and other assets were worth more than the going concern so 'good business' required liquidation. (This company was one of the few manufacturing concerns left in our part of California. It was sufficient of a novelty that it had a sideline in renting out its shop floor to movie makers who needed an industrial location.)
The attack on Huawei has another dimension which I feel is doing us in the US damage. Because its 'personal' if I were an Huawei employee I'd be busting a gut working 24/7 to succeed despite Uncle Sam. Simple psychology. Our politicians and bureaucrats really aren't at all smart.
"The attack on Huawei has another dimension which I feel is doing us in the US damage. Because its 'personal' if I were an Huawei employee I'd be busting a gut working 24/7 to succeed despite Uncle Sam. Simple psychology. Our politicians and bureaucrats really aren't at all smart."
This point has been made before - I wonder when/if things will escalate to the point that either war breaks out - or the nationals of either country who are in the other's country are held in camps for their own safety and security.
I think it's quite clear now that this has very little to do with China supposedly snooping on 5G networks and everything to do with the US attempting to retain control of the their hold on things for as long as possible.
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2024
